There are a lot of factors to consider when you’re choosing a technology partner to help you start or scale a drop ship or marketplace program. How quickly will you be able to integrate with new vendors? How flexible is the platform? And what kind of service and support can you expect? One of the most important questions, however, is: what kind of return will you get on your investment?
It’s something we’re frequently asked by prospective clients here at Logicbroker. To get a more precise measure of how our solution generates values, we commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study examining the potential return on investment (ROI) enterprises may realize by deploying our solution. Here’s what they found out:
Forrester interviewed five decision-makers at organizations currently using Logicbroker. For the purposes of the study, they aggregated the experiences of the interviewees and combined the results into a single composite organization, representing a North American retailer with a brick-and-mortar and digital storefront and eCommerce revenue totaling $300 million annually. Before working with Logicbroker, this composite retailer ran a small in-house drop-ship program with no more than a dozen vendors. They turned to Logicbroker because they were facing technical issues with vendor integrations and lacked the necessary resources to support their drop ship program.
Here’s just a sampling of what happened for this composite retailer after deploying Logicbroker:
- The retailer launched its drop ship program with Logicbroker within a matter of weeks. Interviewees estimated that implementing a drop ship solution would take several months. Logicbroker beat those expectations and retailers realized value from the solution faster as a result. This represented an additional $218.2K over three years.
- The retailer grew its drop ship program by an average of 25 vendors each year.Logicbroker managed the integration work, accelerating the onboarding of new vendors, and leading to increased customer traffic and sales. Across the three years of results, that increased scalability represented $5.2 million in revenue.
- The retailer streamlined selling products through other third-party sales channels. Logicbroker supported partnerships with third-party distributors, taking on the technical work of connecting retailers’ systems with distributors to ensure smooth operations. The value from increased distribution of first-party products equaled $69.9K over three years.
- The retailer avoided headcount equivalent to three employees for its drop ship program. Logicbroker handled the technical work for integrations, freeing up the organization’s IT teams, and minimized the need for maintenance. Streamlined operations reduced issues with order delivery, freeing time from customer service employees. The value: approximately $561.5K over three years.
Factoring in the costs of training and annual costs for using Logicbroker, the decision-maker interviews and financial analysis found that the composite organization experiences benefits of $6.1 million over three years versus costs of over $942,000, adding up to a net present value (NPV) of $5.1 million and an ROI of 547%.
It’s gratifying to know just how much value Logicbroker can deliver for retailers. We were also glad to hear that the interviewees in the study reported that they found us to be a supportive drop ship partner who was attentive and responsive. Interviewees also noted that they appreciated our transparent pricing model—a straightforward annual contract, instead of per-transaction fees. Finally, the study showed that retailers saw improved customer engagement and a growing customer base.
For more on the Total Economic Impact™ of Logicbroker, you can download the full study. If you’re ready to talk about whether Logicbroker is the right fit for your drop ship and marketplace goals, get in touch today to schedule a free demo.